Bigger credit unions aren’t necessarily better, but they certainly have advantages that the little guys envy, whether it’s a deeper well of expertise or the economies of scale that a larger size typically provides. Mergers offer a way to acquire that talent or achieve greater cost efficiency quickly for struggling and successful cooperatives alike. It’s also fitting that credit unions bring a Main Street quality to mergers that bears little resemblance to the ruthless activity often seen on Wall Street.
The credit unions profiled this week all put a kinder, gentler, cooperative spin on mergers. Consider, for example, Credit Union of Southern California and The Summit Federal Credit Union. Although they each have completed multiple mergers during the past decade, neither one ever actively sought out another institution to merge with. Instead, they attracted institutions by standing out as the kind of cooperative others want as a merger partner, one that treats these alliances so that the benefits flow to all parties involved. Both credit unions offer tips so that your institution can do the same.
Along similar lines, CitizensFirst Credit Union joined forces with two other cooperatives, BestAdvantage and Lakeview, earlier this year to pioneer a different kind of merger. Instead of one institution taking over the other two, the trio plan to form an entirely new credit union with a different name and brand that all three will have a say in. This collaborative style of merger offers a path for small, healthy institutions that want the benefits of such a deal while still retaining a voice in how the credit union is run.
Sometimes, a merger’s biggest challenge is selling the idea to everyone else. Bryn Vaupel, a senior vice president of retail delivery for Educational Systems Federal Credit Union, believes the right message can persuade skeptical employees or members. Along with other advice for communicating a merger better, she suggests allocating a web page where information about the deal can be found and updated regularly.